In the world of China biopharma, news of progress came from a broad front last week: there were four stories about deals, two stories concerning progress on new drugs, and another four stories on corporate developments.
WuXi PharmaTech (NYSE:WX) disclosed that it had filed for a 10 million share secondary offering, with more than half of the shares coming from selling stockholders (see story). Chairman and CEO Ge Li will supply 1 million of the ADSs from his personal holdings. WuXi said that $70 million of its share of the proceeds would go toward building new facilities. WuXi’s ADSs took the news without suffering any decline, but on Thursday, a few days after the secondary announcement was made, WuXi slipped 10% lower on a no-news day. It ended the week at $19.30.
Actavis Group bought a 90% stake in Zhejiang Chiral Medicine Chemicals Company, a company that specializes in supplying APIs to ex-China pharmaceutical companies (see story). Based in Iceland, Actavis is a worldwide provider of generic medicines. Actavis said that it would source some of its APIs from Chiral, a move that will cut its costs significantly. Chiral has almost 200 employees in its Hangzhou API facility, though Actavis did not reveal any details about Chiral’s financials or the value of the transaction. Since 1999, Actavis has been very aggressive in expanding its business through acquisitions.
Transgenomic, Inc. [TBIO.OB] found a China partner in the Guangzhou Family Planning Center of Guangzhou, China (see story). Transgenomic will provide its services (automated high sensitivity genetic variation and mutation analysis) in the Guangzhou laboratory. China law requires that samples collected in China are tested in China. Transgenomic has already installed the necessary instruments in Guangzhou Family Planning Center’s lab to provide its pharmacogenomic services.
China YCT International Group Inc. (OTCQB:CYIG) reported that its China subsidiary, Shandong Spring Pharmaceutical Co., Ltd, would take over the operations of its supplier, Shandong Yong Chun Tang Bioengineering Co. Ltd. (see story). Both companies are run by Yan Tinghe, who is Chairman of China YCT International and the principal owner of Shandong Yong Chun Tang. Under the agreement, China YCT will manage Shandong Yong Chun Tang in exchange for all of the latter’s net profits, and it will eventually buy its supplier for a “fair” price.
In drug news, Frontier Biotechnologies Co. was given the go-ahead by the SFDA to begin clinical trials of a new HIV drug (see story). Albuvirtide is a member of the viral entry inhibitor class of HIV drugs. It targets gp-41, a viral protein that serves as a portal of entry by HIV into healthy (CD4+) T cells. Frontier, which is based in Chongqing, has been the beneficiary of drug development support from the governments of both China and the US. The Chongqing government is supporting the construction of a production line for the drug candidate.
Aida Pharmaceuticals, Inc. (OTCPK:AIDA) announced the existence of a new wide-spectrum antibiotic that was part of the package it acquired when it bought the Jiangsu Institute of Microbiology Co., Ltd. (see story). Wetimicin is in Phase I clinical trials. The drug is in the same family of amino-glycoside antibiotics as the Etimicin Sulphate antibiotics that are the current mainstay of Aida’s revenues. Aida expects the new drug will begin its Phase II trials sometime this year.
Turning to corporate news, Adaltis [TSX: ADS] said it would move the focus of its in-vitro diagnosis business to China, locating its manufacturing there and seeking to increase its sales in China (see story). The Montreal company said it currently derives 25% of its income from China. Traditionally, Europe has been the biggest market for Adaltis, but now the company expects to concentrate on selling its Eclectica system, a compact and affordable benchtop analyzer, and other products in the developing world, especially China.
Becton, Dickinson (NYSE:BDX) opened its second China facility in Suzhou (see story). The new plant manufactures rapid diagnostic products for flu and viral infections. It is expected to employ 700 people when it reaches full capacity. BD’s first facility in the Suzhou Industrial Park, built in 1995, supports the BD Medical business.
Wyeth (WYE) said it would not build an R&D center in China, blaming the long wait for IND approval from the SFDA (see story). In the US and Europe, the IND process involves only a 30-day waiting period, though it takes nine months or more in China. Wyeth will, however, begin contracting more early-stage development work to China-based chemical and biological CROs, and it will also increase the number of Asia-Pacific patients in global trials from 25% currently to 30%.
And finally, China Shenghuo Pharmaceutical Holdings (KUN) reported net 2007 earnings were $4 million on sales of $20 million (see story). The revenue figure came in below expectations because Shenghuo began instituting more stringent credit conditions on its distributors. Shenghuo continues to depend on Xuesaitong Soft Capsules, a traditional Chinese medicine that increases blood circulation: it produced 90% of all sales. In 2008, Shenghuo will introduce Tian Xin Soft Capsules, and it will continue the Phase III clinical trial for Wei Dingkang Soft Capsules, a traditional Chinese medicine that treats peptic ulcers by inhibiting the growth of helicobacter pylori.